US stock market, economy and companies update (June 03, 2014)

- The S&P500 made a fresh all-time high late in yesterday's session around 1925, but indices have sold off since then and investors seem skittish about moving things higher. Note that trading volumes remain lighter this morning, while the 10-year yield continues to give up ground, moving up to 2.561% on today's session. As of writing, the DJIA is down 0.26%, the S&P500 is down 0.11% and the Nasdaq is down 0.21%.

- EUR/USD almost touched 1.3650 this morning following the May Euro Zone CPI reading out overnight. The CPI data matched a 4-year lows at 0.5%, giving the ECB yet another reason to take action on Thursday. Dealers had feared inflation might decelerate even faster given the recent German and peripheral readings. Note that there was at least one contrarian voice heard after the data. A Sunrise Securities analyst said an ECB rate cut is not a given since the CPI only matched the low in March and did not make a new low.

- May auto sales clearly showed an explosion of pent-up demand, contrasting sharply with very modest results seen in April. The Big Three US automakers totally crushed expectations in reports out this morning. Chrysler's sales jumped 17% in May, GM sales surged 12.6%, twice expectations for 6.4% growth. Ford sales climbed 3.0%, vaporizing expectations for a 0.2% decline. Ford said it sees the US seasonally adjusted annual selling rate near the high end of a 16-17M range in the month of May. Shares of F and GM were up a bit in the early going.

- AT&T raised its full-year revenue forecast for a second time, citing strong growth in its wireless business. The firm offered a range of Q2 metrics guidance, and forecasted net postpaid wireless subscriber additions would exceed 800K, compared to 625K in Q1 and 551K in Q2 of 2013, which was the company's best Q2 postpaid net adds figure in four years. AT&T said it would sell 3.2M smartphones in the quarter under its new AT&T Next program, which lets customers get a new device every 12-18 months when paying a monthly installment plan. Shares of AT&T are about flat on the day.

- The contest for Hillshire Brands is sharpening up as Pilgrim's Pride boosted its offer to $55/shr from $45/shr prior, beating out Tyson Foods' own improved $50/shr offer from late last week. After receiving the latest offer, Hillshire's board has authorized official negotiations with both Tyson and Pilgrim's Pride under language in its standing merger agreement with Pinnacle Foods. Both offers are conditioned on the termination of the Pinnacle Foods deal. Shares of Tyson had given up more than 2.5% in the premarket but are back to unchanged as of writing, while PPC is down slightly. HSH is up 8.5%.

- Shares of analog semiconductor name Skyworks Solutions are up 4% after the firm modestly raised its third quarter guidance this morning. Executives offered broad commentary on the improved outlook, citing growing opportunities in the very buzzy internet of things, plus more opportunities from the recently announced Panasonic joint venture.